The following information has been taken from two articles posted by HR Daily and RCSA they provide clear warnings to employers about getting your performance management processes and bullying and harassment policies and procedures well in hand.
Data from the first quarter of the Fair Work Commission’s anti-bullying regime underlines the importance of training managers and supervisors to minimise legal risks during performance management discussions, an employment lawyer says.
While new statistics published by the Commission show that only one application resulted in orders, the tribunal dismissed only six of the 151 claims received under Section 587 of the Fair Work Act.
(That section allows the Commission to dismiss an application if it is not made in accordance with the Act, if it is frivolous or vexatious, or if it has no reasonable prospects of success.)
What this means, according to DLA Piper partner Murray Procter, is that most of the claims the Commission has received “must have merit”.
“The fact there has only been one order shows that claims may not yet have progressed to the order stage, or have been resolved through conciliation. Conciliation would typically involve confidential agreements being reached about expected standards of behaviour,” he said.
According to the Commission’s report, employees made 133 of the 151 applications and a majority of workers (109) alleged bullying by their managers.
“It is difficult to say with complete certainty, but the fact the overwhelming majority of alleged bullying was by managers suggests that those complaints have been resolved by the Commission ‘brokering a deal’ between the worker and their manager,” Procter said.
“This is the type of ‘performance management’ by commission that we anticipated and reinforces that it has never been more important to train managers and front line supervisors about avoiding legal risk during performance management discussions.”
Procter added that while the data has mixed messages for employers, they should not let the statistics dull their attention to bullying risks in the workplace.
Fewer claims than anticipated
The number of anti-bullying applications the Commission received fell far short of predictions made before the new regime was in place; last year, FWC general manager Bernadette O’Neill told a Senate Estimates hearing it expected about 3500 applications per year.
The report also shows that the Commission began to deal with all claims within the prescribed 14-day period.
Of the matters finalised, 23 were withdrawn early in the case management process, and five were withdrawn prior to conference or hearing stage. Four were withdrawn after a conference or hearing and before decision, while eight were finalised by decision.
Four applications progressed to mediation, and all of these mediations were conducted by telephone.
Most of the matters (67) related to employees from organisations with more than 100 employees.
Some 27 claims came from workers who alleged they were being bullied by another worker, while a further 20 involved complaints of being bullied by a group of workers. Only three applications involved claims of being bullied by a subordinate.
Workers in the clerical industry were most likely to claim they had been bullied (23), followed by retail (13), health and welfare services (11) and educational services (10).
A recent case and how you can get it wrong
All employees are different, with each person comprising different personality traits, strengths, vulnerabilities and backgrounds. What employees have in common, however, is that employers throughout Australia have a legal duty to take reasonable care for their safety.
Consequently, even where the behaviour complained of is perceived as low-level, or even trivial by a manager, how employers respond to complaints is crucial to not only resolution of the matter within the business but also managing legal risk, including the risk of workers’ compensation claims.
As a recent decision by the Supreme Court of Queensland decision in Keegan v Sussan Corporation (Aust) Pty Ltd  QSC 64 demonstrates, failing to appropriately deal with a bullying complaint can be costly.
Ms Keegan, a former assistant manager employed by retail chain Sussan, alleged that she suffered a major psychiatric injury over 11 days due to bullying and harassment by her new manager, Ms Clarke. As a result of her severe mental decline, Ms Keegan was certified as unable to return to work again.
Ms Keegan sued Sussan, claiming $1.2 million in damages for personal injury and consequential loss as a result of Sussan’s negligence, breach of contract and breach of statutory duty.
The new manager
Ms Keegan was assistant manager at Sussan’s Cairns central store for about six years. In April 2010, Ms Keegan took a period of parental leave. While she was on leave, Ms Keegan’s store manager left Sussan and Sussan’s Queensland Business Manager, Ms Makarein, hired Ms Clarke to replace her.
During the recruitment process, Ms Makarein contacted a former employer who Ms Clarke nominated as a referee. The former employer informed Ms Makarein that she would not hire Ms Clarke again and that she “did not believe that Ms Clarke was manager material and she would need to learn management skills and people skills”.
Despite this unflattering reference, Ms Makarein employed Ms Clarke. Ms Clarke, who had never worked in retail fashion, was given training by Ms Makarein that was limited to on the job training and induction which included Sussan’s bullying and harassment policy.
Ms Keegan returned to work in September 2010 and over three days Ms Clarke subjected her to conduct Ms Keegan believed was bullying. Ms Keegan complained that Ms Clarke’s conduct included:
- being left out of business management matters;
- spoken to aggressively, including during a confrontation about a mop where Ms Clarke held a mop head about 10cm from Ms Keegan’s face and challenged Ms Keegan’s comment that the mop was peeling; and
- unwarranted criticism about various matters such as the previous state of the store.
On Day 3, Ms Makarein telephoned Ms Keegan to ask how it was going between Ms Keegan and Ms Clarke. Ms Keegan stated that Ms Clarke “was good”.
However, following criticism by Ms Clarke in relation to Ms Keegan’s floor mopping the following day, Ms Keegan telephoned Ms Makarein in tears and raised her concerns again.
How Ms Keegan’s complaint was dealt with
After listening to her complaint, it was alleged that Ms Makarein advised Ms Keegan to “put some lippy on and go home to [her] bub” and Ms Makarein would speak with Ms Clarke.
However, Ms Makarein did not follow Sussan’s bullying and harassment policy, which required that complaints be taken seriously, treated confidentially and investigated. Instead, Ms Makarein informed Ms Clarke about Ms Keegan’s allegations and told her to be “more mindful” of how she dealt with Ms Keegan in the future.
On Ms Keegan’s return to work, Ms Clarke confronted Ms Keegan about her allegations and her behaviour worsened. Upon complaining to Ms Makarein that matters were worse, Ms Makarein responded that Ms Keegan had to “work it out for herself”.
Ms Keegan consequently declined mentally and was certified as unable to return to work. Ms Keegan’s mental decline was so severe that she became incapable of caring for herself or her child, requiring her husband and mother to care for both.
Damages and the impact of Ms Keegan’s personality traits
Ms Keegan brought a common law claim for negligence, breach of contract or breach of statutory duty.
Sussan denied liability for Ms Keegan’s psychiatric injury and argued that:
- Ms Keegan’s psychiatric injury was extraordinary and unforeseeable given Ms Clarke’s “essentially unremarkable behaviour”;
- Ms Keegan had pre-existing personality traits that made her prone to psychological injury; and
- assistance from Ms Keegan’s husband and mother exacerbated her injury.
The Court disagreed with Sussan’s arguments. Instead, the Court found that that Sussan breached its duty of care to Ms Keegan and caused her injury. Specifically, the Court found that:
- Ms Clarke engaged in unreasonable and excessive behaviour against Ms Keegan;
- Sussan knew that Ms Clarke was “inexperienced” and should have expected some challenge on Ms Keegan’s return from leave. However, it was initially not aware of Ms Clarke’s behaviour and therefore a reasonable person would not have foreseen Ms Keegan suffering a psychiatric injury;
- However, Ms Keegan’s call to Ms Makarein “put Sussan on notice” that if the matter was not dealt with appropriately, it was reasonably foreseeable that Ms Keegan would suffer psychiatric injury;
- Ms Makarein completely failed to apply and follow Sussan’s bullying and harassment policy or otherwise take another appropriate approach to address Ms Keegan’s complaint. Instead Ms Makarein’s “patronising advice” and method of dealing with the issue clearly indicated that she did not take the complaint seriously;
- Sussan was responsible for Ms Makarein’s and Ms Clarke’s actions;
- While Ms Keegan’s personality traits made her more vulnerable to suffering an injury and Ms Keegan’s husband and mother’s assistance impeded her mental recovery, these factors were not causative of her injury.
Consequently, Ms Keegan was awarded just under $240,000 (after deduction of approximately $66,000 refund to WorkCover).
Lessons for employers
Bullying complaints and stress claims/psychological injury claims are not confined to Queensland. Employers Australia-wide have a legal duty to take reasonable care for the safety of their employees.
It is important that appropriate training is provided to managers, their performance monitored and deficiencies addressed. If a manager is new, this should be assessed during the probation period to determine if employment should continue. Assisting managers to respond and communicate with employees about complaints is essential to support not only employees but also managers in responding and addressing such matters consistent with the organisation’s policies.
As this case demonstrates, however, simply having a policy is not enough – employers need to ensure that their policies are followed and complaints are addressed.
Ms Keegan’s psychiatric reaction and inability to return to work or take care of her child arising out of the events she complained of may be considered extreme. However, as this decision demonstrates, employers have to take their employees as they find them – personality traits and all.
Although employers cannot change employees’ underlying personality traits, they can proactively and appropriately deal with bullying complaints and employee behaviour to manage and defend against claims.
The importance of training in the process of conducting workplace investigations into these sorts of matters is highly important as many supervisory staff lack fundamental skills and knowledge in this area. Workwise offers training conducted by Director Bridget Green which covers tips to successfully manage and traps to avoid when undertaking investigations. Bridget is both an accredited mediator and qualified investigator with many years experience in this increasingly critical area.
Call us to register your interest in our upcoming training session to see how we can up skill your management team in order to support due diligence and fairness and equity in these matters and help your Organisation avoid costly litigation.